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Introduced by   Representatives Pugh of S. Burlington, Fisher of Lincoln, Copeland-Hanzas of Bradford, Hosford of Waitsfield, Botzow of Pownal, Branagan of Georgia, DePoy of Rutland City, Donovan of Burlington, Dostis of Waterbury, Edwards of Brattleboro, Emmons of Springfield, Evans of Essex, Frank of Underhill, French of Randolph, Head of S. Burlington, Hutchinson of Randolph, Kiss of Burlington, Klein of East Montpelier, Larocque of Barnet, Leriche of Hardwick, Livingston of Manchester, Lorber of Burlington, Malcolm of Pawlet, Martin of Springfield, Martin of Wolcott, McCullough of Williston, McFaun of Barre Town, McLaughlin of Royalton, Milkey of Brattleboro, Minter of Waterbury, Mook of Bennington, O'Donnell of Vernon, Pillsbury of Brattleboro, Smith of Morristown and Sweaney of Windsor

Referred to Committee on


Subject:  Human services; subsidies; child care

Statement of purpose:  This bill proposes to increase child care subsidies to ensure that low income working families are able to pay for quality child care.


It is hereby enacted by the General Assembly of the State of Vermont:


The general assembly finds that:

(1)  The total economic impact of the child care industry in Vermont is approximately $426 million annually.  Every dollar spent on child care in Vermont stays in the Vermont economy.

(2)  It is estimated that the child care industry employs approximately 5,000 people in Vermont and contributes to the creation or support of 2,232 indirect jobs.

(3)  Nationally, 61 percent of married couples with children under six had both parents in the workforce in 2000.  In 2002, 80 percent of Vermont women with children under the age of six were in the workforce.

(4)  National studies consistently show that every $1.00 spent on quality early childhood services saves in later education, criminal justice, welfare, foster care, and other social services costs.  Estimates of savings range from $2.00 to over $7.00 for each $1.00 spent on quality early childhood services.

(5)  The department for children and families provides financial assistance to low income families to purchase child care.  The financial assistance is in the form of a subsidy to eligible families.  The annual subsidy amounts are currently $2,586.00 for a family of three, $3,115.00 for a family of four, $3,645.00 for a family of five, and $4,176.00 for a family of six or more.  These rates have not increased since 1999.  In 2000, the average market price for child care was $5,487.00 annually.

(6)  If the subsidy rates had increased by three percent annually since 1999, the rates would now be $3,180.00 for a family of three, $3,831.00 for a family of four, $4,483.00 for a family of five, and $5,136.00 for a family of six or more.

(7)  According to the department for children and families, there is a significant gap between the current child care subsidy rates and the market rates for care, especially for children under age three.  For example, the family earning $28,000.00 with a four-year-old child in full-time child care has a shortfall of between $130 - 200 each month, even with a subsidy.   

(8)  Among working families who pay for child care, 27 percent of low earning families compared with only one percent of higher-earning families spend more than one-fifth of their earnings on child care.

(9)  Assisting low income working families with child care is important and necessary to allow families to remain in the workforce. Child care subsidy rates must reflect the market realities of the costs of child care in order to achieve this goal.

Sec. 2.  33 V.S.A. § 3512(b) is amended to read:

(b)  The subsidy authorized by this section shall be on a sliding scale basis. The scale shall be established by the commissioner, by rule, and shall bear a reasonable relationship to income and family size.  The lower limit of the fee scale shall include families whose gross income is up to and including 100 percent of the federal poverty guidelines in 2006 and shall increase annually no later than January 15 by the rate of inflation.  The upper income limit of the fee scale shall be neither less than 80 percent nor more than 100 150 percent of the state median income in 2006, adjusted for the size of the family, and shall increase annually no later than January 15 by the rate of inflation.  The scale shall be structured so that it encourages employment.

Sec. 3.  33 V.S.A. § 3514(c) is added to read:

(c)  The commissioner shall increase the subsidy rates for child care provided to eligible families incrementally through 2010 in order to establish the maximum subsidy amount at 75 percent of the child care rates paid in the private market in Vermont.  After subsidy rates have reached this amount, the commissioner shall increase the subsidy rates annually by January 1 for child care provided to eligible families by the same percentage as that for general fund growth.   

Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont